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Tuesday, July 21, 2009

Developers Begin Raising Prices Of New Projects

Source : The Straits Times, July 21 2009

Brisk weekend sales indicate continuation of strong momentum

SALES of new condominium projects continued at a robust pace last weekend, despite some developers starting to test the market with slightly higher prices.

Buyers picked up 120 units at Waterfront Key in Bedok Reservoir at an average price of $735 per sq ft (psf), even though that price is higher than that at the neighbouring Waterfront Waves condo, where units are going at $700 psf on average.

The developer sold 120 units of the Waterfront at an average price of $735 psf. -- PHOTO: FAR EAST ORGANIZATION.

Both are 99-year leasehold projects and are being jointly developed by Far East Organization and Frasers Centrepoint.

In the Upper Changi area, Hong Leong Group sold 50 more units of The Gale on Flora Road at prices ranging from $650 to $725 psf - up from $650 to $700 psf the previous weekend. This makes 265 units sold to date at the 329-unit freehold development, or about 80 per cent.

In the higher-end segment of the market, City Developments (CDL) has also raised prices for its newly launched Volari@Balmoral by 2 per cent, after it saw a fairly good take-up rate over the weekend.

CDL released 65 units out of a total of 85, and sold about 55 of them. The average price of the units sold was over $2,000 psf, it said in a press release.

The developer added that almost half the buyers were foreigners. Prices start from $2.7 million for a two-bedroom unit.

The transactions over the weekend indicate that this month's home sales figures are likely to maintain the strong momentum started in February, which has seen more than 1,000 new homes sold every month.

Another interesting point: fewer buyers appear to be taking up the interest absorption scheme, which allows them to defer the bulk of their payments until their apartment is completed but often at a higher price.

Only a third of the buyers at The Gale took up the interest absorption scheme. About 20 per cent of Volari@Balmoral's buyers opted for the scheme, which means they paid 2 per cent more for their units.

At Waterfront Key, 'practically all' the buyers went with the normal progressive payment scheme, said Far East Organization's chief operating officer Chia Boon Kuah. This could be because interest absorption for this project comes at a 4 per cent premium.

When asked why the prices were higher at Waterfront Key than at Waterfront Waves, Mr Chia mentioned the project's 'thoughtful facilities', including three outdoor villas and two 'island villas', as well as the fact that all units would have views of either the park, reservoir or pool.

The developers released 176 units at Waterfront Key last Friday. A further 102 units will be released during the project's public launch this Saturday. The condo has 437 units in all.

Of the buyers last weekend, about 60 per cent were HDB upgraders, said Mr Chia. They bought mainly the smaller units: all the 57 two-bedroom units from the first to 15th storeys have been sold, at prices starting from $593,000. The four-bedders, which are 1,518 sq ft in size, are going for up to $1.42 million each.